Interleukin-4 is a multifunctional type I cytokine made by T cells and by basophils and mast cells in response to receptor-mediated activation. It mediates its function through a heterodimeric receptor consisting of the IL-4 receptor (R) alpha chain and the gamma c chain. The IL-4Ralpha chain mediates growth and gene activation through distinct mechanisms. Growth depends upon a receptor domain centering on Y497 that acts as a docking site for a series of PTB-domain-containing proteins including IRS-1, IRS-2, Shc, and the newly identified molecule Frip-1. Gene activation and differentiation depends upon an independent domain of the receptor. Among the genes activated in response to IL-4 is a newly identified immediate early gene designated Fig-1, which is homologous to FAD-binding proteins including monamine oxidase. Fig-1 expression is limited to lymphoid cells. The IL-4Ralpha chain domain responsible for gene activation contains three STAT-6 binding sites. These domains mediate their imputed functions when expressed in chimeras with a truncated IL-2Rbeta chain. This functional distinction is also supported by the properties of cells from STAT-6 knockout mice, which fail to mediate IL-4-determined gene activation but can respond to IL-4-mediated growth signals. Differentiation of naive T cells into IL-4-producing cells is dependent upon IL-4 itself. An important source of such "early-acting" IL-4 is a population of CD4+, NK1.1+ T cells, largely specific for CD-1 and enriched in cells that use Vbeta8 and Valpha14 chains in their T cell receptors. These cells are quite numerous among liver, Peyer's patch and portal blood T cells, suggesting that they play a particularly important role in immune responses mediated by gut lymphoid tissue. Culture of purified CD4+, NK1.1+ T cells shows that they rapidly lose expression of NK1.1 upon activation. These are capable of producing IL-4 upon activation in vitro, even in the absence of IL-4 in the initial culture, although adding IL-4 does increase their capacity to produce IL-4. However, production of other effector cytokines depend upon the conditions of the initial culture. Conventional TH1-like T cells from T cell receptor transgenic B10.A mice appear unable to acquire the capacity to produce IL-4, even if recultured in the presence of IL-4. By contrast, TH2-like cells can become excellent producers of IFNgamma; their acquisition of this phenotype depends upon the absence of IL-4 and the presence of IL-12 during restimulation. These results suggest mechanisms through which ongoing immune responses may be regulated.